Laura, thanks for the info on your mortgage. I have lived and worked in England, but never owned a house (or even seriously considered it). So, I had no idea that mortgage rates could be so low.
For comparison, in the US, a mortgage rate under 4.5% is almost unheard of, and many people consider anything under 6% to be really good.
L & M - FI in 2020
Bear in mind that a lot of UK mortgages are trackers which look good just now as the Bank of England keeps interest rates low. That won't last (certainly not over the 25 year repayment term) and, in the past, we've seen base rates at 15%. When interest rates rise from their current lows a lot of people are going to experience a lot of buyers' regret.
Tracker rates are not so good if you start one now - cheapest seem to be around 2% over base. But there must be a fair few people on legacy rates such as Laura.
How's it work in foreign parts? Are most people using fixed rate mortgages?
@laura: do you have family or personal connections with Portugal? What guided your choice of location? I know we're all part of one big happy EU these days but, while I'm happy to travel, the idea of permanently upping sticks from Blighty would make me feel a bit odd!
Tracker rates are not so good if you start one now - cheapest seem to be around 2% over base. But there must be a fair few people on legacy rates such as Laura.
How's it work in foreign parts? Are most people using fixed rate mortgages?
@laura: do you have family or personal connections with Portugal? What guided your choice of location? I know we're all part of one big happy EU these days but, while I'm happy to travel, the idea of permanently upping sticks from Blighty would make me feel a bit odd!
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jacob
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In the US various levels of insanity has seen
The no-money down mortgage.
The stated income mortgage (also known as LIAR loans). Also NINJA loans (no income, no job, no assets).
The adjustable rate mortgage (ARM).
The ARM with an introductory teaser rate.
The nonamortizing ARM (interest only).
The negative amortizing ARM, where payments don't even cover interest.
The last two involve a large balloon payment at the end of the loan in which case they're typically refinanced.
The no-money down mortgage.
The stated income mortgage (also known as LIAR loans). Also NINJA loans (no income, no job, no assets).
The adjustable rate mortgage (ARM).
The ARM with an introductory teaser rate.
The nonamortizing ARM (interest only).
The negative amortizing ARM, where payments don't even cover interest.
The last two involve a large balloon payment at the end of the loan in which case they're typically refinanced.
As Jacob points out, there are plenty of mortgage options in the US. A lot of Americans do use fixed rate mortgages. Many people have locked in mortgage rates b/w 4.5% and 7%. Often the term is 30 years, and the rate is not subject to change. Also, there is a tax deduction in the US for mortgage interest paid, thus reducing the amount of money lost to interest.
Because of this situation, in the U.S., there are a large number of people who advocate having a mortgage.
Because of this situation, in the U.S., there are a large number of people who advocate having a mortgage.